South Caucasus builds new transport system along Europe-China link

11.08.2026

A new transport system takes shape in the South Caucasus. Azerbaijan expands capacity along the Middle Corridor, Armenia and the US prepare a route through Syunik, and Georgia attempts to resume construction of the Anaklia deepwater port. These projects reside at differing stages: some service growing freight flows already, while others exist as agreements and plans for now. Together, they point to a substantial shift: regional nations build transport connections whose operation no longer requires Russian territory, infrastructure, or political mediation.

These projects cannot displace Russia from South Caucasus trade completely. Furthermore, Russian exporters use several new routes as well. However, Moscow loses gradually what it held long term in the region — infrastructure indispensability.

The Trans-Caspian International Transport Route, frequently termed the Middle Corridor, forms the basis of the new system. This represents a network connecting China and Central Asia with Europe through the Caspian Sea, Azerbaijan, Georgia, and Turkey, rather than a single railway or road.

Interest in this direction rose sharply following Russia's full scale invasion of Ukraine. Sanctions, financial restrictions, and operating risks on Russian territory forced shippers to seek alternatives to the Northern Corridor. In 2023, westbound transport volumes along the Russian route contracted by 51 percent. Attacks on vessels in the Red Sea, followed by war around Iran and transport disruptions through the Strait of Hormuz, provided additional momentum to the Middle Corridor.

The Middle Corridor is shorter than the sea route through the Suez Canal and, with smooth operations, can secure freight delivery from western China to Europe in 14–18 days. However, these indicators remain targets rather than sustained norms for now. The route requires multiple transhipments: from rail to vessel on the eastern Caspian shore, back to rail in Azerbaijan, and another maritime or land operation heading from Georgia to Europe.

Nevertheless, freight flows grow rapidly. While roughly 0.6–0.8 million tonnes moved along the route annually in 2019–2021, volume exceeded 4.5 million tonnes in 2024. Container transport expanded from 20.5 thousand TEU in 2023 to roughly 57 thousand in 2024 and 76.9 thousand in 2025.

Following the outbreak of war between the US and Iran, demand for the Trans-Caspian route, according to Azerbaijani logistics expert Rauf Agamirzayev, stood 450–500 percent higher in a single week than a year earlier. Concurrently, container handling times in the ports of Aktau and Baku tripled, as demand spikes exposed existing capacity limitations immediately.

Combining investments and organizational reforms could triple freight flows and halve transport times by 2030. Building new berths and railways proves insufficient for this. Route nations must harmonize tariffs, digitalize documents, simplify border crossings, and establish unified transport management.

Primary tasks include expanding port capacity, modernizing railways, updating the Georgian section of the line to Turkey, developing the railway crossing across the Bosphorus, and improving connections with Romanian and Bulgarian ports. Without this, the Middle Corridor remains an alternative route handling partial freight during crisis periods, rather than transforming into a stable Eurasian transport system.

Azerbaijan occupies a central position on the Caucasian section of the Middle Corridor. Freight arriving across the Caspian from Kazakhstan and Turkmenistan passes through the port of Alyat, heading by rail to Georgia and Turkey subsequently.

Current capacity of the Baku International Sea Trade Port stands at an estimated 15 million tonnes of cargo and 100 thousand containers annually. The next stage must expand this to 25 million tonnes and 500 thousand TEU. Following modernisation in 2024, throughput capacity of the Baku–Tbilisi–Kars railway expanded from one to five million tonnes annually.

Baku seeks to turn this infrastructure into a political resource alongside transit revenue. Azerbaijan becomes a necessary intermediary between Central Asian states, Turkey, and European markets. In 2025–2030, the European Bank for Reconstruction and Development intends to link economic diversification support for Azerbaijan with regional transport connection improvements.

However, Azerbaijan's infrastructure leadership faces limitations. Vessels remain scarce on the Caspian, sea level drops complicate port operations, and sharp transport growth creates queues.

Land borders of the country remain closed for standard passenger traffic, despite rail connections resuming with Georgia. Tickets for the Baku–Tbilisi train sell out rapidly, sales systems suffer disruptions, and a one way trip costs 200–220 manats (roughly 103–114 euros).

This serves as a private yet revealing example of gaps between state ambitions and transport connection availability for residents.

Until recently, Armenia remained excluded almost completely from new transit routes. Borders with Azerbaijan and Turkey are closed, railways reside under concession with a subsidiary of Russian Railways, and the primary land route to Russia passes through Georgia and the Upper Lars border crossing, which closes regularly due to weather conditions.

The first practical change occurred in autumn 2025. Azerbaijan permitted freight transit to Armenia, and in November a train carrying 1,048 tonnes of Russian wheat passed through its territory and onward via Georgia. Subsequently, roughly one thousand tonnes of grain from Kazakhstan arrived in Armenia via the same route. A Kazakh operator announced readiness to supply 15–20 thousand tonnes of wheat monthly to Armenian buyers.

The volume of trial deliveries remains small on its own. The precedent created proves important: Azerbaijan became a transit territory for freight bound for Armenia for the first time after decades of conflict.

The new route can provide Yerevan with additional import channels, reducing dependence on Upper Lars.

Concurrently, the first train carried Russian wheat specifically. New infrastructure does not exclude Russian freight necessarily — it deprives Russia of control over the sole delivery route. For Armenia, this means capabilities to choose suppliers and delivery paths, lowering vulnerability to disruptions on the Russian-Georgian border.

Broader changes link with TRIPP — Trump Route for International Peace and Prosperity. The project involves constructing a transport line through a 43 km section of the Syunik region of Armenia, connecting main territory of Azerbaijan with Nakhchivan, and onward with Turkey.

According to the framework agreement between Armenia and the US, establishing a TRIPP development company is planned, holding 74 percent American ownership and 26 percent Armenian ownership. Yerevan retains sovereignty over its territory, with border, migration, and customs authority remaining with Armenian state bodies. In July 2026, the government of Armenia approved the agreement and forwarded it to the Constitutional Court, after which the document enters parliament.

TRIPP cannot count as an operating route yet. The line itself is unbuilt, operational and security issues remain unresolved, and execution depends on Armenian-Azerbaijani settlement stability. Yet the project alters regional political architecture already.

Unlike communication unblocking agreements concluded under Moscow mediation in 2020, the new model contains no Russian control over the route.

Establishing shared infrastructure can form a material basis for peace: an operating route creates economic interest for Armenia and Azerbaijan to preserve agreements. Concurrently, it links Central Asia and the Caspian with Turkey via an additional path independent of Russian territory.

Virtually all western branches of the Middle Corridor pass through Georgia. From here, freight moves by rail to Turkey or via Black Sea ports to Romania, Bulgaria, and other European nations.

Tbilisi continues discussing route development with Central Asian states. In July 2026, Georgia and Turkmenistan agreed to develop cooperation in transport and logistics. Both nations view the Middle Corridor as a foundation for expanding bilateral trade and Central Asian access to the Black Sea.

Yet the Georgian section remains a primary bottleneck. The port of Poti approaches capacity limits, railway infrastructure requires modernisation, and the country lacks a deepwater port capable of accepting large container ships.

Anaklia was intended to resolve this issue. The $2.5 billion project launched in 2016 through the Georgian-American Anaklia Development Consortium. American operator SSA Marine planned to manage the terminal. Construction began in 2017, yet in 2020 the Georgian Dream government terminated the contract, accusing the consortium of failing financial obligations.

Opposition and project participants considered the decision politically motivated. Anaklia was meant to do more than expand port capacity: a deepwater port created a major hub on the eastern Black Sea coast connected to the West, capable of competing with Russian ports. Following contract termination, work halted, and the state spent years preparing a new tender.

In December 2022, the government announced project resumption incorporating mandatory state participation. The state held 51 percent of shares, with remaining 49 percent intended for a private investor. Authorities postponed partner selection and work commencement deadlines repeatedly. In spring 2024, Prime Minister Irakli Kobakhidze promised to select a construction company by late May and begin infrastructure work in June.

Anaklia's commercial prospects remained subject to debate. Proponents believed Georgia could not accept growing Middle Corridor flows or become a regional hub without a deepwater port. Sceptics pointed to high construction costs and requirements to secure sufficient cargo volumes beforehand. Yet even sceptics conceded that existing infrastructure restricts transit potential.

In 2024, Swiss-Luxembourgish and Chinese-Singaporean groups became tender finalists. Ultimately, authorities selected a consortium led by state owned China Communications Construction Company. This decision coincided with deteriorating Georgian relations with the US and EU, and government rapprochement with China and Russia.

Selecting CCCC drew criticism in Washington and within Georgia. The company and linked structures faced previous American restrictions. Opposition and former Georgian officials warned that transferring the project to a Chinese state consortium distances Tbilisi further from the US, altering the geopolitical purpose of the port.

A port conceived as an element of Western presence and an alternative to Russian infrastructure risked passing under Chinese state company control. Concurrently, American doubts grew regarding Georgia's ability to remain a reliable Western partner. Appointing the Chinese partner occurred alongside foreign influence law adoption, mass protests, and American visa restrictions against Georgian officials.

Possible CCCC participation failed to eliminate economic risks. Financing sources, cost distribution terms, cargo flow guarantees, and future Chinese management roles remained unclear. Political opacity surrounding the tender reinforced doubts regarding project execution under the new variant.

These doubts proved true. The Chinese consortium failed to sign a binding investment agreement. Throughout 2025, negotiations stalled effectively. By early 2026, construction ground to a halt again. Georgia missed opportunities to become a major distribution center for flows between Central Asia, China, and Europe, while the emerging infrastructure vacuum allowed Russia to preserve regional logistics significance.

In July 2026, the withdrawal of Chinese companies was confirmed conclusively. The government announced a transition to a landlord model: maritime and primary port infrastructure remains state property, with foreign partners invited to manage individual terminals. Tbilisi promises to commission the first stage in 2029, yet names no new strategic investor or future operator.

One cannot claim conclusively that Chinese companies exited specifically due to Georgian government rapprochement with Russia: the consortium provided no public explanations for its decision.

Yet political continuity remains clear. The government halted the initial project with Western investors amid foreign policy shifts, attempted replacement with a Chinese partner, and left the strategic port without a confirmed investor following failed negotiations.

Anaklia, conceived as a Black Sea route exit bypassing Russia, became an example of how foreign policy choices retard alternative creation. Georgia preserved favorable geography, yet compromised its role within the new transport system.

New routes do not signal cessation of South Caucasus economic ties with Russia. Russian goods arrive in the region, Russian companies preserve assets, and the Northern Corridor exceeds the Trans-Caspian significantly in transport volume.

Viewing every tonne moved along the Middle Corridor as a direct Russian transit loss proves inaccurate as well. Portions of this freight moved by sea previously or remained uncarried. Furthermore, routes through Georgia and Azerbaijan service Russian goods deliveries to Armenia already.

The shift resides elsewhere. Russia loses three types of monopoly gradually.

First — transit monopoly. China, Central Asia, and Europe gain a route avoiding Russian territory.

Second — infrastructure monopoly. For South Caucasus trade, Russian railways and border crossings cease serving as sole available options.

Third — political monopoly. Armenia and the US discuss TRIPP without Moscow participation, while Azerbaijan, Turkey, Kazakhstan, and European institutions negotiate Middle Corridor development independently.

This system remains far from complete. Vessels remain scarce on the Caspian, Georgian and Turkish railways require modernisation, border procedures remain slow, TRIPP is unbuilt, and Anaklia lost a second strategic investor.

Yet individual system elements operate: freight flows along the Middle Corridor expand, Baku expands port and rail capacity, and trains pass through Azerbaijan to Armenia already.

The primary result comprises choice emergence rather than Russia's disappearance from regional trade. Choice deprives Moscow of capabilities to control neighbouring economic ties through transport lack of alternatives. Anaklia's history demonstrates process limits: favorable geography proves insufficient on its own. Alternatives to the Russian transport network emerge only where infrastructure investments receive sustained political support.

By Zhenya Snezhkina for Respublika (Kazakhstan).